Coordinated with product design, distribution and promotion decision
to form a consistent and effective marketing program

Target Costing – “Can we sell it for that? “by determining the cost first before designing the new product.

Non-price positioning – try to use other marketing mix to
create non-price positions (e.g. Sony builds more value into its customer electronics products
and charges a higher price than many competitors

nBuild on quality, promotion, distribution when price is not a critical
factors among 4Ps

(3)Costs

Fixed Costs – Costs that do not vary with production and sales level (e.g. Machinery)

Variable Costs –
Costs that vary with the level of production (e.g. Labor)

-Corporate Marketing System – integrate successive stages of production and distribution under
single ownership (e.g. G2000 and Giordano)

-Contractual Marketing System – in which a channel member, called a franchiser, links several
stages in the production-distribution process (e.g. Franchising Organization – e.g. Coca Cola and McDonald’s and
Burger King)

-Administrated Marketing System – leadership is assumed not through common ownership or contractual
ties but through the size and power of one or a few dominant channel members (e.g. Wellcome Supermarket or P&G)

Horizontal Marketing Systems

-in which two or more companies at one level join together to follow a new marketing opportunity (e.g.
Bank of China in Hong Kong)

Multi-Channel Distribution Systems

-in which a single firm sets up two or more marketing channels to reach one or more customer segments
(e.g Bank – ATM, Online website, Telephone and retail outlets, IKEA – Online/Off line Catalogue, retail outlets
and Sales forces)

Changing Channel Organization

-Disintermediation – the replacement of traditional resellers from a marketing channel by radical
new types of intermediaries (e.g. Dell Computer)

-Intensive Distribution – stocking the product as may as outlets as possible (e.g. FMCG)

-Exclusive Distribution (1 only)– giving a limited number of dealers the exclusive rights to distribute
the company’s product in their territories

-Selective Distribution (more than 1) – the use of more than one, but fewer than all, of the intermediaries
who are willing to carry the companies; products (e.g. electrical appliances or luxury products)

Evaluating the Major Alternatives

-Economic Criteria

-Control Criteria

-Adaptive Criteria

Designing International Distribution Channels

-Evaluation over China and Japan Markets Vs Western World

Channel Management Decisions

Selecting Channel Members

Managing and Motivating Channel Members

-Partnership Relationship Management

-e.g. Amazon (e.g. Associate Alliance) or GE (e.g. Customer Net)

-CRM System by most companies

Evaluating Channel Members

-By sales quotes

-By average inventory level

-By Customer delivery time

-By treatment of damaged and lost goods

-Cooperation in company promotion and training program

-Services to Customers

Public Policy and Distribution Decisions

Exclusive
Dealing – e.g. exclusive territorial agreement

Marketing Logistics and Supply Chain Management

Nature and Importance of Marketing Logistics

-Outbound Logistics (e.g. moving products from the factory to resellers and ultimately to customers)